PH eyeing 'joint exploration' in 2 S. China Sea areas – Palace

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Metro Manila (CNN Philippines, March 3) — Malacañang said Friday negotiations with China are ongoing regarding a possible joint exploration deal in two areas in the South China Sea.

Presidential Spokesperson Harry Roque said the areas of Service Contracts (SC) 57 and Service Contract 72 are being considered for the exploration.

"We are still in the process of negotiating with China. Wala pa pong desisyon [There has been no decision yet]," Roque said in a press briefing in Tarlac.

SC 57 is an undisputed area within the Philippines' Exclusive Economic Zone (EEZ), and lies beyond China's nine-dash line claims in the South China Sea. Roque said this meant the country can agree to jointly explore it with China.

"Exclusive Economic Zone refers to exclusive right to explore and exploit. But it is your sovereign decision kung gusto mo magkaroon ng joint exploration [it is your sovereign decision if you want a joint exploration]," he explained.

The Department of Energy (DOE) said SC 57 is a joint exploration of state-run PNOC Exploration Corporation, Mitra Energy Ltd., and China's state-owned China National Offshore Oil Company (CNOOC). The area of the exploration is located offshore of Northwest Palawan. 

But Roque said SC 72 is another story, since it covers a disputed territory.

SC 72 refers to the agreement on the Reed Bank off Palawan in 2010. The government awarded exploration rights to an area in Reed Bank to United Kingdom-based oil and gas company Forum Energy Plc. (FEP). The majority of FEP's shares are owned by business tycoon Manny V. Pangilinan.

"(Kinakailangan) magkaroon muna ng kasunduan ang dalawang bansa bago po matuloy itong joint exploration na ito. Pero ang joint exploration naman po, gaya noong nangyari ng Joint Maritime Seismic (Understanding), it will be implemented by corporations and not by sovereign states," he said.

[Translation: We need to have an agreement between both countries before this pushes through. But joint exploration, like with the JMSU, it will be implemented by corporations and not by sovereign states.]

The JMSU tripartite agreement was signed in Manila on March 14, 2005, with the Philippines, China, and Vietnam as signatories. It allowed the countries to jointly explore with the Philippines oil resources in the country's claimed territories in the South China Sea.

Too much, too soon

However, maritime expert Jay Batongbacal took issue with Roque's statement on SC 57.

"SC 57 is not a disputed area, therefore, this is not a case of joint exploration, but rather unilateral exploration by the PH carried out by a sub-contractor, one of whom happens to be CNOOC," he said in a statement Saturday.

Batongbacal further said by classifying the activity in SC 57 as "joint exploration," it opens the possibility of elevating the status of China's state-owned oil company from a sub-contractor to a "co-owner" of Philippine waters.

"The government appears to be offering all of Philippines' waters to joint exploration with (China), not just the West Philippine Sea. It seems to be 'downgrading' the status of SC 57... as being equivalent to an area also disputed by China," Batongbacal said.

He added Roque's statement implies any and all areas, even uncontested  Philippine waters, are open to joint exploration with China.

China has been in a maritime row with the Philippines over parts of disputed waters in the South China Sea. Although the government has proposed joint exploration with China in the South China Sea, Roque said there will be no co-ownership since the Philippines will "definitely not" recognize China's claimed sovereignty.